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A Short Note on the Tobin Tax: The Costs and Benefits of a Tax on Financial Transactions
Almost each time volatility in equity, debt, or currency markets increases, there are cries to introduce a tax of financial transactions, first proposed in Tobin (1974).
Author(s):
Professor of finance, EDHEC Business School.
This tax is motivated by the view that the excess volatility in financial markets is the result of trading by speculators"; thus, even a small tax on financial transactions would "throw some sand in the wheels" of financial markets, and hence, by slowing down the trading activity of speculators would reduce volatility. In this position paper, Raman Uppal, professor of finance at EDHEC Business School, discusses the costs and benefits of such a tax on financial transactions.
| Type: | Position paper |
|---|---|
| Date: | le 12/07/2011 |
| Research Cluster : | Finance |
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Operating from campuses in Lille, Nice, Paris, London and Singapore, EDHEC is one of the top 15 European business schools. Fully international and directly connected to the business world, EDHEC is a school for business, rather than a business school, where excellence in teaching and research focuses on innovation to stimulate entrepreneurship and creativity. EDHEC functions as a genuine laboratory of ideas and produces innovative solutions valued by businesses. The School’s teaching philosophy, inspired by its award-winning research activities, focuses on “learning by doing”.
